Sherman’s largest employer is planning an expansion of its facility.
Officials with the Sherman Economic Development Corp. confirmed Tuesday that Tyson Foods Inc. is planning to invest $30 million in building and equipment on an 80,000-square-foot expansion of its local facility. The expansion will increase the capacity of the local facility’s material handling department. The SEDCO board approved a performance agreement with a $1.5 million incentive for the local beef and pork products production facility during its meeting Tuesday morning.
“We’re very excited,” SEDCO Executive Vice President Stacey Jones said of Tyson’s expansion plans. “It means one of our largest employers is planning to stay and grow in our community, so that’s a great thing for our community.”
Jones said Tyson has an estimated start date for the expansion of mid January and expects it to be completed by September 2020. Despite the increase to its capacity, Tyson is not planning to add any additional jobs with this expansion.
“For this portion of it, they won’t have to (hire anyone new), but it will retain all 1,703 employees,” Jones said. “Doing this will open up opportunities to grow.”
SEDCO’s performance agreement went into effect Tuesday and will expire May 31, 2021. The $1.5 million incentive, which is 5 percent of the company’s total planned capital investment, will be delivered to Tyson in two payments of $750,000 after the company makes $15 million of its planned capital investment and after it reaches the $30 million threshold.
Tyson, which is the largest employer in Grayson County, last expanded in 2013, when it added 75 jobs and spent $11 million in capital investments as part of a more than $40 million investment in four of its plants. For that expansion, SEDCO gave the company a $460,000 incentive over a two year period.
In a fiscal earnings report issued Tuesday for the final quarter of the 2017-2018 fiscal year, Tyson reported the company’s beef sales volume increased due to a greater availability of cattle supply, as well as a stronger demand for its beef products and increased exports. Its pork sales volume decreased as a result of the company balancing its supply with customer demand during a period of margin compression.
“Tyson Foods produced solid earnings in fiscal 2018, demonstrating the strength of our differentiated portfolio and diversified business model,” Tyson President and CEO Noel White said in press release issued about the report. “We exceeded our revised guidance due to a strong finish in the fourth quarter in the Beef and Pork segments.”
White, who was appointed to his position in September, said company executives believe its fiscal year 2018-2019 adjusted earnings will be $5.75 to $6.10 per share, based on current assumptions.”
“We expect continued strong cash flow generation as we grow sales and volume, particularly in value-added and branded products,” White said. “I am confident in our team members and their ability to execute our strategy to sustainably feed the world with the fastest growing protein brands. Our strategy is working, and it has allowed us to produce good returns this year and will enable continued long-term growth.”